Two Florida Republicans in the U.S. House are looking to ensure that professional sports organizations pay their fair share in taxes.
At the end of last week, U.S. Rep. Greg Steube, R-Fla., brought out the “Properly Reducing Overexemptions for Sports Act.” U.S. Rep. Matt Gaetz, R-Fla., is co-sponsoring the proposal.
“This bill prohibits any organization from being tax-exempt if it is a professional sports league, organization, or association, a substantial activity meant to foster national or international professional sports competitions and has annual gross receipts in excess of $10 million,” Steube’s office noted. “The legislation is expected to save American taxpayers roughly $100 million over the course of a decade. Professional sports organizations have received the 501(c)(6) status and exemptions since 1966. Traditionally, nonprofit organizations are prohibited from engaging in political speech or endorsing political organizations. Recently, professional sports players and coaches have been kneeling during the national anthem as a form of political protest. Aside from the obvious revenue issues, if professional sports teams want to engage in political speech using their sport as a platform, they should be prohibited from the tax-exempt status as a nonprofit.”
Steube weighed in on why he introduced the proposal on Friday.
“Professional sports organizations are simply not nonprofits and they should not be receiving the same tax breaks and treatment, especially when many of them are bringing in tens of millions of dollars in profits each year,” Steube said. “Closing this loophole is common sense and will save taxpayers millions of dollars over time.”
The bill was sent to the U.S. House Ways and Means Committee at the end of last week.
U.S. Sen. Joni Ernst, R-Iowa, has introduced the bill in the Senate in recent years including in June 2018 and in April 2019.
“Professional sports leagues – which are raking in millions of dollars from television rights and membership dues – shouldn’t also be scoring a hole-in-one with their taxes,” said Ernst when she joined with U.S. Sen. Angus King, I-Maine, to bring out a version of the bill in 2018. “The PRO Sports Act amends the tax code to revoke this unnecessary exemption, saving approximately $100 million in taxpayer dollars over 10 years. Senator King and I are cutting this wasteful spending and protecting taxpayer dollars.”
“Sports leagues like the NHL and the PGA Tour provide entertainment for millions of Americans, but that doesn’t mean these league-specific brands should be able to utilize Section 501(c)(6) of the tax code to be tax-exempt,” said King. “This bill would help close loopholes that allow leagues to boost their profits at the expense of taxpayers – it’s just common sense.”
Ernst and King brought the bill back last year but it has lingered before the U.S. Senate Finance Committee since April 2019.
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